Author: Barry Cawthorn – Bawdens Managing Director
What happened in 2022?
In 2022, the global industrial and logistics sector continued its robust performance. Leasing activity in the United States registered the second highest level of all time [1].
In Australia, large construction pipleines in the logistics sector added new inventory but not fast enough to keep up with demand, so rents continued to rise throughout the year.
Bawdens manages in excess of 800,000m² of space today with a current vacancy rate of less than 1% today [2]. This lack of available space contributed along with inflation to continuing growth in net face rentals throughout the year that exceeded on average 12%.
What’s Next?
Forecasts suggest e-commerce sales should gain an additional share of total retail sales over the next decade. Whilst we expect e-commerce growth to continue to be a driver for industrial property, the anticipated growth in the cost of land and building particularly in Sydney, will continue to underpin competition for existing space in established precincts across the metropolitan area. We anticipate this will somewhat mute the effects of falling prices from rising interest rates. The impact of inflation upon input costs to business will be increasingly passed onto consumers as companies retain required operating margins. Holders of CRE in Australia are well capitalized and so confident today. We expect to see very little distressed activity in the year ahead, with the typical consumer in the major east coast cities also expected to remain securely employed.
[1] Deloitte Insights
[2] Bawdens Research
For more information, our latest edition of Industrial Property News can be found here: https://bawdens.com.au/bawdens-industrial-property-news-issue-155/
Category: Research, Trends & Insights
Topics: Industrial Property Rentals, Inflation Adjusted Rentals, Data & Analytics
Solutions: Industrial Research, Performance Overview